Home buying and selling reform: Making the commercial case for change – Rudolf
As I hope you already know, the government’s Home Buying and Selling Reform programme has the potential to change how property transactions are carried out, with proposals covering upfront information, sales packs, digital property data and greater use of technology, alongside longer-term changes intended to improve certainty and reduce transaction delays.
In the first two articles of this three-part series, I have looked at why we need to consider these reforms as a whole, rather than focusing on individual proposals, and whether the move towards upfront information represents an additional burden or a commercial opportunity for those involved in the home moving process.
For this final article, I want to consider what will encourage firms to change established working practices, why advisers and conveyancers must remain central to the process, and how we can demonstrate that reform makes commercial sense rather than simply asking the industry to accept another set of requirements.
Why wait for reform to become compulsory?
One of the challenges with any major reform programme is that businesses can understandably be reluctant to change established processes until they are required to do so, particularly where those processes are shaped by professional obligations, lender instructions and the expectations of other parties.
For conveyancers, even where the reform will reduce risk and give them the opportunity to charge a proper rate for all of the work they do, there are understandable concerns about what might initially appear to create more work without any corresponding financial benefit.
Episode 6: What’s next for the industry? : Powered by Partnership podcast from Newcastle for Intermediaries
Sponsored by Newcastle for Intermediaries
However, if we wait until every element of reform is mandated before changing how transactions are handled, we could miss opportunities to improve the process considerably sooner.
Voluntary adoption of sales packs and identification of legal material information, leading to earlier information gathering and greater collaboration between those involved in a transaction, could provide an opportunity to demonstrate what works, identify problems and establish better practices before further requirements are introduced.
The question is how we encourage firms to take those steps when they already operate in a market where margins can be tight and the demands upon their time are considerable.
Putting a financial value on reform
At The Conveyancing Association, we believe one of the answers is to demonstrate the commercial benefits much more clearly, rather than relying solely on arguments about improving the home moving experience.
We are therefore working on how we can show the potential time and cost savings that conveyancing firms could achieve through shorter transaction times, fewer avoidable delays and earlier identification of legal and property issues.
For example, if a transaction currently takes approximately 137 days, what could reducing that timescale towards 90 days mean for a firm completing a substantial number of transactions every month?
There is potentially a significant difference in the time files remain open, the amount of ongoing administration required, the number of outstanding matters being managed simultaneously and the capacity available to undertake additional work.
However, we also need to distinguish between saving time and generating additional profit, because a shorter transaction does not automatically mean a firm has reduced its costs or increased its income.
That is precisely why we want to develop data that firms can use to understand the potential financial implications for their own businesses, rather than simply presenting shorter transaction times as an achievement in themselves.
If we can demonstrate that adopting sales packs and resolving issues earlier could improve efficiency, increase capacity and strengthen profitability, the argument for voluntary adoption becomes considerably more persuasive.
Benefits beyond conveyancing
Although our immediate focus is on the commercial case for conveyancers, these potential improvements would not be confined to legal firms, because every participant in the transaction is affected when delays arise or a purchase fails to complete.
Mortgage advisers will recognise the considerable work involved when a case encounters unexpected property problems, mortgage offers approach expiry, or clients have to reconsider their borrowing arrangements because a transaction has taken longer than anticipated.
Estate agents similarly spend substantial time progressing agreed sales, while lenders require reliable information and certainty that the properties they are financing meet their requirements. If better information is available earlier, and problems are identified before they threaten a transaction, there should be opportunities to reduce wasted work across the market while also giving buyers and sellers greater confidence in the process.
Working together to make change worthwhile
Collaboration between conveyancers, estate agents, mortgage advisers, lenders, surveyors and technology providers is therefore vital, because no individual profession can deliver the improvements government wants without changes elsewhere in the process.
To aid this, the Home Buying and Selling Council has created clear, straightforward guidance that you can share with your clients. Sign up for free to access its toolkit on the council’s website to see what is available to you to ensure consumers get the same message from everyone they ask for advice in the process.
Conveyancers have an essential role in identifying legal issues impacting the buyer’s intended use of the property and ensuring transactions can proceed safely, but they need reliable information, consistent requirements and the involvement of other parties at the appropriate stages.
Equally, lenders and advisers need confidence that changes will improve the quality and timing of information rather than create additional stages, which make mortgage applications and property purchases more complicated.
We will continue working with the wider industry to help establish how these changes can operate in practice, while ensuring conveyancing firms have a strong voice in shaping the processes they will be expected to follow.
Ultimately, if we want businesses to embrace reform voluntarily, we need to demonstrate what they stand to gain from doing so, rather than simply telling them that change is necessary.
That is why putting meaningful figures around the potential savings matters, because if we can show that shorter, more efficient transactions make commercial sense for conveyancers while also benefiting advisers, lenders, agents and their clients, we have a much stronger case for making those improvements now rather than waiting for legislation to require them.
